Those engaging in the trading of items through the online access of a computer system often need additional information to determine the details of that which is being offered as the subject of the trade, to gauge the merits of the trade, and possibly plan a more involved trading strategy. For purposes of this application, the term “trading” includes the transfer of any consideration for the subject of the trade—termed “item” herein—and the ordering of one or more items. An “item” may be anything of value including a financial security, for example, stocks, commodities, bonds and derivatives such as futures, forwards, options, and swaps. A “customer” is any individual or entity that may, or does engage in the trading of items whose value varies according to market perception such as coins, stamps, books, objects of fine art, craftsmanship, and those having historical significance, among others. A customer is also referred to herein as an investor for purposes of this application. The present invention has application to all such items, including properties and securities, that may be bought and sold in a generally open marketplace at a price that varies according to market perception, including with respect to the trading of stock equity options. Embodiments of the present invention will be described by reference to one type of item—security options—but has utility with respect to all items.
Security options—such as stock options—are essentially contract rights that can be bought and sold on the open market. By paying a certain premium amount, the owner of an option acquires the right to buy or sell the underlying security at a designated strike price during a limited period of time prior to expiration of the option. Buyers and sellers of options are termed “holders” and “writers”, respectively. A “call option” is an option to buy a certain security at a specific price on or before a certain date. If the underlying security increases in value over the strike price, the value of the call option then increases, as well. The owner of a call option may exercise the right to purchase the security before the expiration date of the option, logically whenever the security exceeds the strike price, at which time the option seller becomes obligated to sell the security. If the security does not exceed the strike price, the owner has lost nothing more than the price paid for the option, or the option premium. A “put option” is an option to sell a security at a specific price on or before a certain date. The owner of a put option may exercise the right to sell the security before the expiration date of the option, logically whenever the security falls beneath the strike price, at which time the option seller becomes obligated to buy the security. If the security does not fall beneath the strike price, the owner has again lost nothing more than the option premium.
To offset potential financial liabilities that might otherwise accrue from changes in the value of an underlying security, investors often seek to acquire option rights as a type of financial insurance policy. Similar to paying an insurance premium, the cost of buying call options becomes a standard business expense, required for proper risk management. In like manner, investors sell put options to obtain a calculable minimum return on investments as a means for ensuring against financial risk. Separate and apart from their risk management function, security options may furthermore provide investors with a potentially lucrative trading instrument, allowing for investment in the performance of the underlying security with a lesser amount of investment capital required.
Investing in options typically requires specialized financial knowledge. Without it, individual investors may not be aware of the benefits and opportunities that trading in certain options provide, nor the range of possible trading strategies. However, the average individual investor typically does not have access to the same quantity and quality of market information that is ordinarily available to those routinely involved in trading options.
Securities web sites are popular because they allow investors to manage investment information. Financial institutions, including brokerages, have implemented online services that allow investors to engage in trading of various securities over data communication networks, including the Internet. As used herein, the terms “order”, “trade”, and/or “trading” generally refers to transactions such as buying and/or selling. Any investor having access to the Internet may more directly engage in trading activity without having the need to speak to a broker to enter his or her orders in the marketplace for execution.
In addition to the many advantages that may be realized in standard accounting procedures, brokerage firms dealing in financial securities have sought to expand their capabilities for improved interactive computerized communication with their individual retail account investors. Prior to the appearance of the Internet, trading orders from such retail investor clients could be communicated only in person or via telephone, whether using voice or fax transmission, or by delivery of the order through conventional means such as the postal mail. Processing such trade orders typically would require a certain amount of time—minimally from perhaps a few minutes to as much as several hours or more—thereby resulting in a lag in the amount of time before the trade was executed. More recently, online communication capabilities have made it possible for individual investors of financial brokerage firms to have trade orders entered and executed more rapidly, thereby decreasing the lag time to at times less than one minute of lag time between the investor completing the entry of the order online and receiving a reply confirming an online trade confirmation communicated electronically.
In addition, and in further contradistinction to the fairly limited range of standard and traditional types of trading modalities that were previously available to their retail clients, brokerage firms have begun to offer expanded modes of interactive communication and a greater range of trading information, thereby permitting individuals great control over their accounts.
However, while more and more information becomes available online, the information often takes a great amount of time and effort to access. Navigating to the various levels of information then back to the screen at which the trade is executed is often difficult and fraught with danger. Getting lost in these levels of information may be a typical occurrence. Remembering what is relevant to the trade while navigating back to the screen at which the trade is executed is a challenge to most investors.
Therefore a need exists for a system and methods by which a wide variety of information may be provided to an investor readily and, in certain embodiments, without navigating away from the screen at which the trade can be executed. The present invention satisfies the demand.